U.S. Bancorp Settles With 38 States on Consumer Privacy

WASHINGTON — U.S. Bancorp reached an agreement with 38 states, including California, over claims that the bank violated consumer protection laws by providing details of customers’ accounts to an outside telemarketing firm, officials said Friday.

The St. Paul, Minn.-based bank’s settlement with the attorneys general of 38 states and the District of Columbia is nearly identical to the one it reached in June 1999 with the Minnesota attorney general’s office.

The Minnesota investigation centered on an arrangement that involved telemarketer Memberworks Inc. paying U.S. Bancorp $4 million plus commissions for financial and personal information on 900,000 customers.

In the latest settlement, 29 states will divide $2 million in consumer restitution and monetary damages and consumers in the remaining states will qualify for refunds if they bought a nonfinancial product or service from a telemarketer and didn’t use it, U.S. Bancorp spokeswoman Wendy Raway said.

Under the settlement, U.S. Bancorp agreed to stop the practice of sharing customer account information with third parties for the purposes of marketing nonfinancial products and services, the Ohio attorney general said in a statement.

The bank will make refunds to customers in all the states who purchased a product or service but didn’t use it.

Consumers eligible for a refund will be notified by the bank.

U.S. Bancorp also has to tell consumers about its privacy policy and give consumers the ability to “opt-out”--or refuse up front--any sharing of their financial information.

The settlement is the latest resulting from the telemarketing arrangement. On Sept. 1, U.S. Bancorp said it would pay $3 million to settle a private class-action lawsuit.